Jean-Claude Trichet : ECB will exercise 'strong vigilance' against inflation risk
European Central Bank Chairman, Jean-Claude Trichet is hawkish to during the news conference of the ECB Rate decision for June, and the interest rates remain 2.5% for May. If the economic growth is maintained further withdrawal of monetary accomodation will be warranted, in such practices, the ECB is very much likely to raise 25 bps in June and another 25 bps in September.
Yesterday the New York session ended with a high of 1.2636 for EUR/USD and throughout the Asian & London session, trades were formed in a channel awaiting the ECB decision on the interest rates for the pair, until late London session where EUR/USD were seen bearish breaking through down-side of the channel signalling a bearish EUR/USD. But this could be a false breakout which is to attract more traders as a chance to go long on the euro dollar. Turned out that the market is fundamentally driven by the hawkish statement made my Trichet signalling a hike of expected 25 bps in June although he's not ruled out the 50 bps increase. The euro dollar continue it's rally on the uptrend breaking the resistance of the Tuesday high-turned-resistance at 1.2669. Currently the pair is trading at 1.2684.
Seems that the EUR/USD is losing it's energy trying to break the 1.2700 which was said to be heavily guarded or it's accumulating enough energy to penetrate through 1.2700. 2 scenario is now expected as the next move
Scenario 1:
If EUR/USD reach 1.2700 just for the sake of reaching it without any aggresive price movements, most likely it will head back down for a big retracement.
Scenario 2:
If the EUR/USD breached 1.2700 aggresively then we'll most likely seeing the pair hitting a high ground of 1.3000. Then a big retracement of the euro-dollar. A happy ending for me.
If scenario 1 happens, I would close my position when reaching 1.2700 and take my profit for the EUR/USD @ 1.2660. Then I would have another Long USD/CHF position to breakeven my EUR/USD trades.
If it happens to be scenario 2, then I will continue to take profit every 50 pips the EUR/USD gains, I've positioned my trade all the way to 1.2960. So from there if the reversal sign is sighted. I will go Long USD/CHF for breakeven purposes and go on from there.
Personally, I would prefer scenario 2 to happen but the market ain't your bitch. They don't care what you want or how you want it to happen. Instead they will try to 'out-run' you so you'll be eaten by the 'bear' instead of them.
============
Existing Trades
============
Long EUR/USD @ 1.2610
Long EUR/USD @ 1.2660
Long USD/CHF @ 1.2380
Yesterday the New York session ended with a high of 1.2636 for EUR/USD and throughout the Asian & London session, trades were formed in a channel awaiting the ECB decision on the interest rates for the pair, until late London session where EUR/USD were seen bearish breaking through down-side of the channel signalling a bearish EUR/USD. But this could be a false breakout which is to attract more traders as a chance to go long on the euro dollar. Turned out that the market is fundamentally driven by the hawkish statement made my Trichet signalling a hike of expected 25 bps in June although he's not ruled out the 50 bps increase. The euro dollar continue it's rally on the uptrend breaking the resistance of the Tuesday high-turned-resistance at 1.2669. Currently the pair is trading at 1.2684.
Seems that the EUR/USD is losing it's energy trying to break the 1.2700 which was said to be heavily guarded or it's accumulating enough energy to penetrate through 1.2700. 2 scenario is now expected as the next move
Scenario 1:
If EUR/USD reach 1.2700 just for the sake of reaching it without any aggresive price movements, most likely it will head back down for a big retracement.
Scenario 2:
If the EUR/USD breached 1.2700 aggresively then we'll most likely seeing the pair hitting a high ground of 1.3000. Then a big retracement of the euro-dollar. A happy ending for me.
If scenario 1 happens, I would close my position when reaching 1.2700 and take my profit for the EUR/USD @ 1.2660. Then I would have another Long USD/CHF position to breakeven my EUR/USD trades.
If it happens to be scenario 2, then I will continue to take profit every 50 pips the EUR/USD gains, I've positioned my trade all the way to 1.2960. So from there if the reversal sign is sighted. I will go Long USD/CHF for breakeven purposes and go on from there.
Personally, I would prefer scenario 2 to happen but the market ain't your bitch. They don't care what you want or how you want it to happen. Instead they will try to 'out-run' you so you'll be eaten by the 'bear' instead of them.
============
Existing Trades
============
Long EUR/USD @ 1.2610
Long EUR/USD @ 1.2660
Long USD/CHF @ 1.2380
posted by 4xTrader at
1:28 PM
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